Volkswagen is following the lead of Daimler by making a more aggressive push in India in a bid to steal market share from native brands Tata Motors and Ashok Leyland.
Volkswagen owned Scania and MAN are vying for the premium end of the market against Tata’s Prima range and Ashok Leyland’ U Truck range. It would also be up against Daimler’s Indian brand, Bharatbenz.
According to MAN Trucks India managing director Joerg Mommertz, VW’s common drive train will make MAN and Scania more competitive in India.
“By forming a truck and bus holding inside the Volkswagen group the three companies have to look for synergies. We have a clear strategy here as per which we completely separate our market activities. There is no mix or links in our market presence that means sales and after sales entities work like competitors,” he said.
The two companies have started collaborating on components and intend to take it forward to sharing of platforms, engines and gearbox in the near future. This will allow them both to be price competitive.
“In the back end we have our supplier conference together to use the strength of synergies from the power of the group. MAN is much stronger in India with higher sales than Scania. But being part of the same group we have to look for synergies,” Mommertz said.
“We are using Scania gearbox tuned to our preference in our products in Europe. So these are such synergies we are looking for to make business sense.”
The MAN boss admits the real battle ground is in the 16-tonne and above classes, with local players such as Eicher having command on the smaller truck market.
“Market segment below 16 tonne is still very strongly dominated by the local players and so price competitive that it is quite difficult to enter the segment. But it may change in the future,” he added.
“Entering a new segment in a new market is only possible if one does the engineering locally. The engineering centre we have a manpower strength of 100. We are always looking forward.”
Like Daimler, India will become VW’s hub for exports for the African, Middle Eastern and central Asian markets, with MAN aiming to build its exports from 40 to 50 per cent of production in the coming two to three years.